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End-of-day quote Bolsa De Valores De Colombia  -  05-26
13540.00 COP    0.00%
05/20Gilinski launches offer for up to 32.5% of Grupo Argos shares
05/16Third Gilinski offer for Nutresa shares declared void
05/16TRANSCRIPT : Grupo Argos S.A., Q1 2022 Earnings Call, May 16, 2022
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Analysis-Colombian conglomerate GEA could be cornered by hostile Gilinski

12/16/2021 | 11:43am EDT
FILE PHOTO: Chocolates are seen in the production plant of the of the National Chocolate Factory, a company belonging to the Nutresa group, in Medellin

BOGOTA (Reuters) - Colombia's largest conglomerate, Grupo Empresarial Antioqueno (GEA), has limited options and little time to fight off hostile offers for stakes in some of its key companies, analysts told Reuters.

GEA - a sprawling group of more than 100 companies where many own significant stakes in one another - is so far facing two public acquisition offers led by Grupo Gilinski.

The contretemps with banker Jaime Gilinski - one of Colombia's richest men and the owner of GNB Sudameris, among many other businesses - is shaking up GEA's previously quiet conglomerate of tightly interwoven holdings, an arrangement that had until recently protected it from takeover attempts.

GEA groups many of Colombia's most important companies, including food producer Nutresa, industrial conglomerate Grupo Argos, bank Bancolombia, cement-maker Cementos Argos, energy generator Celsia and pension fund Proteccion.

Investment holding company Grupo SURA, which owns 20% to 50% stakes in many of the other GEA companies, is the jewel in its crown.

Gilinski launched a public acquisition offer for up to 62.625% of shares in Nutresa, a purchase worth some $2.2 billion, in November with the backing of Abu Dhabi's Royal Group.

Gilinski who has given few interviews, has told local media he thinks the company is simply a good investment.

Royal Group, an investment company chaired by Tahnoon Bin Zayed Al Nahyan, the United Arab Emirates' national security advisor, will hold 49.9% of the shares bought through the offer, while Gilinski will control the rest.

The offer for Nutresa was unprecedented on the Colombian market, both for its size and for attempting to move on the behemoth GEA. It has been extended until Jan. 12.

The market was further shocked three weeks later when Gilinski made another offer for up to 31.68% of Grupo SURA, at a cost of up to $1.19 billion, according to Reuters calculations of stock market data.

Both Argos and SURA have ruled out selling any of their stakes in Nutresa to Gilinski.

They said after the offer announcements they would seek international minority partners and they consider Gilinski's offers - especially for Nutresa - to be below market value.

"It's a very hostile scenario for the (GEA) group," said Laura Triana, analyst at Acciones y Valores brokerage. "This way, Gilinski really limits the possibilities for Grupo SURA and Grupo Argos to cover themselves because he's coming in from two fronts."

Gilinski will hold all shares bought through the Grupo SURA offer, which is aided by financing from the First Bank of Abu Dhabi, according to the formal offer announcement published on Thursday.

IHC Capital Holding LLC, also controlled by Al Nahyan, has signed a letter of intent with Gilinski to potentially act in future as a capital partner in his Grupo SURA participation, pending regulatory approval, the document showed.

The SURA offer will take place between Dec. 24 and Jan. 11.

Though major shareholders like other GEA members could make counteroffers - especially if they managed to raise funds from international partners - the clock is ticking and Gilinski's financial muscle is stronger thanks to his Royal Group backing, analysts told Reuters.

"The authorization by the financial regulator for the initial public offering for Nutresa came so fast that I'm not sure how quickly a counteroffer strategy can be pulled together," said independent analyst Daniel Escobar.

Nutresa's share price has risen nearly 30% since Gilinski announced the acquisition offer, but it is still below the $7.71 per share he is offering.

Many in the market say Gilinski is undervaluing Nutresa and SURA, criticisms also leveled by SURA and Argos, which cited independent valuations by major banks.

"Gilinski isn't paying a control premium, it's almost a fair share price, and in these hostile buying operations normally the prices are higher," said Escobar.

Trading of Grupo SURA shares haa been suspended pending the formal announcement of the offer, but will resume on Friday.

Gilinski's son Gabriel told Reuters he could not comment until after the public offers have finished. Spokespeople for Grupo SURA, Grupo Argos and Nutresa declined to comment.

Argos has also said it will speed efforts to consolidate several investments in road and airport concessions, energy and real estate into one vehicle that it hopes to list on the New York Stock Exchange.

Analysts said an offer for Argos itself could also be in Gilinski's plans and that the public offers may also be the first step for him to regain a lost asset - Bancolombia bank.

Grupo Gilinski sold the bank, then called Banco de Colombia, to GEA in 1997. A dispute about how the payment was made led to more than a decade of civil lawsuits, which finally ended in 2010 with an agreement between the two companies.

Two brokers who have spoken to Grupo Gilinski staff handling the public offers told Reuters on condition of anonymity that though Gilinski's principal focus is accumulating stakes in GEA companies, his desire to reach Bancolombia through the Grupo SURA offer is evident.

"When you listen to them the hostile tone is notable... they are going after it all," said a broker involved in the Nutresa offer. "If Gilinski manages to buy, he'll be in the group and in the future he can go for Bancolombia."

Grupo SURA owns about 46% of Bancolombia shares.

Bancolombia had no comment.

(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Nick Zieminski)

By Nelson Bocanegra

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
BANCOLOMBIA S.A. 4.67% 43950 End-of-day quote.26.66%
CELSIA S.A. E.S.P. 0.72% 4200 End-of-day quote.0.38%
CEMENTOS ARGOS S.A. 0.38% 4999 End-of-day quote.-18.18%
FIRST ABU DHABI BANK P.J.S.C. 5.98% 19.84 End-of-day quote.6.54%
FIRST BANK 1.00% 14.18 Delayed Quote.-3.24%
GEA GROUP AG 0.96% 37.77 Delayed Quote.-21.46%
GRUPO ARGOS S.A. 0.00% 13540 End-of-day quote.-0.07%
GRUPO DE INVERSIONES SURAMERICANA S.A. -3.57% 40500 End-of-day quote.35.00%
GRUPO NUTRESA S. A. 7.78% 40590 End-of-day quote.41.72%
ROYAL GROUP CO.,LTD. -2.08% 4.71 End-of-day quote.7.05%
THE NASDAQ COLOMBIA INDEXED MARKET 2.49% 409.532954 Real-time Quote.11.97%
All news about GRUPO ARGOS S.A.
05/20Gilinski launches offer for up to 32.5% of Grupo Argos shares
05/16Third Gilinski offer for Nutresa shares declared void
05/16TRANSCRIPT : Grupo Argos S.A., Q1 2022 Earnings Call, May 16, 2022
05/12Grupo Argos S.A. Reports Earnings Results for the First Quarter Ended March 31, 2022
04/25Gilinski acquires another 3% of SURA in third public offer
04/21Grupo Argos will not participate in public offer for SURA, Nutresa share
03/30GRUPO ARGOS S.A. : Ex-dividend day for quarterly dividend
03/20GRUPO ARGOS S.A.(BVC : GRUPOARGOS) dropped from FTSE All-World Index
02/28Gilinski becomes top shareholder in SURA after acquisition offer
02/28Colombia's Grupo SURA hits Q4 net profit as COVID-19 pandemic eases
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Sales 2022 16 829 B 4 317 M 4 317 M
Net income 2022 918 B 235 M 235 M
Net Debt 2022 15 374 B 3 944 M 3 944 M
P/E ratio 2022 12,6x
Yield 2022 3,37%
Capitalization 10 701 B 2 745 M 2 745 M
EV / Sales 2022 1,55x
EV / Sales 2023 1,46x
Nbr of Employees 12 852
Free-Float 48,7%
Duration : Period :
Grupo Argos S.A. Technical Analysis Chart | MarketScreener
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Technical analysis trends GRUPO ARGOS S.A.
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Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 3
Last Close Price 13 540,00 COP
Average target price 14 433,33 COP
Spread / Average Target 6,60%
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Managers and Directors
Jorge Mario Velasquez Jaramillo President & Chief Executive Officer
Alejandro Piedrahíta Borrero Vice President-Strategy & Finance
Rosario Cordoba Garces Chairman
Ana Cristina Arango Uribe Independent Non-Executive Director
Armando Montenegro Trujillo Independent Non-Executive Director
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